Gretchen Morgenson write about the upcoming vote on Bank of America’s shameful attempt to overturn the shareholder-mandated split of Chairman and CEO.
[T]he vote on Tuesday is only a little bit about the value of separating the chairman and chief executive roles at Bank of America. It is a lot more about reminding the bank’s directors not to treat shareholders with contempt.
While corporate directors claim to work in their shareholders’ best interests, it is all too clear that many boards believe they serve the company’s chief executive first and foremost. Votes on governance matters, such as executive pay practices and director elections, are a crucial way for investors to keep boards attentive to their shareholder duties. So is Tuesday’s vote.
“Power is the only issue here,” said Bob Monks, a governance expert who is chairman of ValueEdge Advisors, an activist firm. “This is simply saying power is with the C.E.O. and any structural arrangement that purports to dilute his power will be driven out.”